With [Bank of America] trading below book and the cheapest in our group, we see additional near term upside because 1) GSE settlement implications for non agency losses (size and potential for settlement) and reduced reps/warranties tail risk; and 2) earnings release on Jan. 21 where we could see [Net interest margins] improving, credit continuing to improve and commentary around capital management.

Translation: Bank of America is trading below book value, a best-guess measure of the sum that could be raised if the bank liquidated all of its assets immediately....MORE